Embedded value

There is a clear way of gauging a company’s attitude towards business-IT alignment – see who it puts forward to present on the subject.

So it was a telling moment at Future of Software 2008 when pensions giant Standard Life fielded two speakers, one from each side of the historical divide: Garry Morrison, director of group pensions, and Ian Muir, chief architect of group IT.

Morrison claimed, “Everything I know about IT could be written on the back of a postage stamp.” But that doesn’t bother him: “It’s not my job to understand IT – it’s to know how it can help [the business].”

And help it has. Pension funds under management have doubled in the past three years, even as the admin overhead has been cut by 40%, freeing Morrison’s business staff to deal with more complex issues and develop relationships with the pension scheme administrators who place their members’ investments with Standard Life.

“Ecommerce technology played a fundamental role in making this possible,” Morrison explained.

A ringing endorsement for IT by any standard, it has not come about without some bold moves in terms of the transformation of the role of IT within the organisation. “[Until recently] our IT colleagues were in a different building and only started a new app if business had signed it off in the blood of the sponsoring director,” Morrison said

Now, the IT team is embedded within the pension department, developing and maintaining applications and responding to a continuous flow of information from Standard Life colleagues and customers.

“The conventional wisdom is that these two [worlds] can be uncomfortable bedfellows,” Morrison said. “Our experience is that, through the intelligent deployment of technology, they are not mutually exclusive.

“We discovered that, contrary to popular belief, business and IT people do speak the same language.

There were also things Standard Life could get customers to do themselves, such as integrating their HR systems to the company’s own back-end system.

The cog behind that kind of flexibility is Standard Life’s SOA – but that is not Morrison’s concern.

Business fluency

Ian Muir stressed the need for IT to “speak to business people on their terms. They need to feel that IT is flexible and pragmatic,” he explained.

When the SOA project started back in 1999, a key premise was to make sure that services were available across multiple channels. “We also support multiple service versions – this way we can update them without impinging on business,” said Muir

As a motivator, Muir’s team puts a value on the savings they generate through increased efficiency – currently in the vicinity of £20 million. “That’s

not money we give back to Garry – unfortunately for him,” he explained.

Much of the increased efficiency has been gained through the reuse of different components in different applications – currently reuse is running at an impressive 53%.

“A Gartner analyst told me that if we got to 50% reuse he would eat his hat,” Muir said. He’s looking forward to the spectacle.

This focus on efficiency has led the team away from trying to justify projects using ROI – “We want to know how we are doing today rather than how we were doing yesterday” – and into a trust-based model.

“Garry and I wouldn’t be sharing a stage if that trust didn’t exist,” Morrison interjected. “I have the confidence that the IT team will continue to give me the [competitive] edge.”

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